We all know London is an expensive place, regularly at the pinnacle of those world city league tables where they compare prices for a croissant, cup of coffee, cinema ticket, etc.
However, what isn't clear from these surveys is what Londoner's themselves think is required to meet their basic needs such as clothing, food, housing, and to participate in society at a minimum level.
That's why Trust for London funded The Centre for Research in Social Policy at Loughborough University to see if they could set a benchmark which Londoners think no one should fall below; they explored what Londoners need to achieve this adequate standard of living and how much it costs.
They did this by talking in detail to a cross-section of Londoners in a number of boroughs. While many costs are similar in the capital to other urban areas in the country, some key differences mean that living here costs around 20 to 50 per cent more. That's a significant margin, which generally isn't reflected in the wages of Londoners in low-paid jobs.
The most significant increase in costs is for single working-age adults in Inner London, whilst the lowest is for a couple pensioner in Outer London.
Many additional costs arise from higher prices, especially relating to housing, public transport and childcare but this is not the only source of extra costs. Some are influenced by the way people live and the infrastructure of London. For example, because the buses, tube and rail are so good, no one felt a car was necessary to achieve an adequate standard of living in the capital.
For different groups, different costs are critical. For single working-age adults the main difference between inside and outside of London related to housing; for families with children it was childcare; for pensioners in Inner London it was the costs associated with social participation.
What was surprising was how modest Londoner's expectations are and their willingness to accept less than those in the rest of the UK, at least in relation to some needs. The clearest example of this is housing. Single working-age adults agreed that living in a studio flat or sharing a flat was acceptable in London, whereas outside of the capital a one bedroom flat was agreed as the minimum. Similarly, families with children in London agreed a flat was acceptable, whereas outside of the capital a house was the minimum housing model. The accepted norm is to have less space here in London.
But the knock on effect of this is having less space to socialise at home; and the potential for increased stress which creates a greater need to escape the pressure cooker of the big smoke. As a result, for some households the budget for social participation and leisure activities increased above the UK average, particularly for single working-age adults and pensioners in Inner London. But these were not extravagant requests. For single working-age adults it meant going out for a meal once a fortnight, rather than once a month, as is the case for those living outside the capital. The budget for this is a modest £10, enough to get a meal in Nandos or a cheap curry down Brick Lane. It's probably not enough for a meal in a shi-shi pad in Soho or hipster hangout in Hoxton. For some households the frequency for eating out was even less. For example, parents in Outer London felt three times a year was sufficient to achieve a minimum standard of living.
On other costs, again there are no luxuries, or nice-to-haves. There's no budget for smoking and in terms of alcohol, a cheap bottle of wine a week is the most any individual will be able to purchase with their budget, even if they did shop at Lidl or Aldi. The food budget for a single adult works out to just under £7 a day, whilst for a couple with two children it's less than £4 a day. So much for there being a flat-white economy, there's barely enough there to stretch to a cup of tea at a greasy spoon.
Not surprisingly there are a large number of Londoners who aren't able to afford this minimum standard of living. Overall around 1 in 3 don't have adequate incomes, whereas in the rest of the UK the number is around 1 in 4. For families with children, the proportion is even higher, at over 4 in 10. Whereas for pensioners it is the lowest proportion at 1 in 5. But even then, this is higher than for pensioners outside the capital.
When looking at safety-net benefits, these fall well short, covering only around one-third of a minimum budget for single adults and only half for families with children. The same applies to wages. Londoners working on the national minimum wage have disposable incomes between a half and three-quarters of what is needed depending on their household type.
The gap is even higher if a household lives in the private rented sector. For single and couple working-age adults with no children, the researchers assumed they would rent in the private sector. For all other households it was assumed they would be in the social rented sector. However, increasingly this is proving difficult. If families or pensioners have to rent in the private sector, their costs will increase dramatically.
We found that for a single working-age adult in Inner London they would need to earn £27,100 a year and £24,100 in Outer London,. This would drop to around £21,000 if they were renting a room in a shared house. As part of this project we've funded a Minimum Income Standard Calculator for London which allows individuals to check whether they earn enough to live in the capital. Adjustments can be made, for example in relation to actual rental costs individuals are paying.
Are we just Metropolis Middle-class Moaners? I would of course say we aren't. This is about the real difficulties and choices facing those at the bottom and those on average incomes. London will have its poor for a long time (unfortunately) but the conditions they live in is an important one for us to address. If we don't, then the likelihood is people living in more overcrowded homes, relying more on foodbanks and getting into debt.
So what needs to happen? We believe a two-pronged approach is needed: improving low incomes, including tackling poverty wages; coupled with policies to bring down costs, particularly housing, transport and childcare. Action is needed by employers to pay at least the London Living Wage and by Government, particularly in relation to affordable housing. Much more needs to be done in relation to costs and thinking about how we enable those on average and low incomes to continue to live here. As this research demonstrates, it's not about Londoner's having more, it's about having enough to live.